Voluntary
Administration is a mechanism for companies in financial distress
to obtain some breathing space from its creditors.
The procedure
comes from Part 5.3A of the Corporations Act 2001. The purpose
of this Act is to allow the company to avoid liquidation and
to have the company administered in such a way that maximizes
the chances of the company and its business continuing; or if
it can't continue, to allow a better return for the company's
creditors and shareholders than would result from the liquidation
of the company.
A
meeting of directors starts the process, and an Administrator
is appointed. The first meeting of creditors is held within
5 days and a second meeting, to decide the company's future,
within 28 days.
Information
Sheets R, S, T & U will provide specific details on the
Voluntary Administration process.
"Voluntary
Administration"
